STOXX has licensed the STOXX® Europe Total Market Defense Capped index as underlying for an ETF managed by Amundi and futures listed on Eurex, offering investors targeted exposure to defense stocks amid a historic upgrade of the region’s military capabilities.
The ETF has received regulatory approval and will be listed on main European stock exchanges in coming days. The Eurex futures started trading on May 12.
The STOXX Europe Total Market Defense Capped index was introduced in March and selects European companies[1] from ICB’s Aerospace and Defense Sector that have revenues from specific defense activities, seeking a focused strategy on the military re-equipment theme. The launch also came amid surging interest from investors in European equities.[2]
Shares in European military suppliers have rallied since Russia’s invasion of Ukraine in 2022, and gains have accelerated this year as US President Donald Trump said Europe needs to forgo the American defense support that has been a pillar since 1945. This calls for an unprecedented ramp-up in production of equipment from missiles to artillery, drones and electronic warfare. The Bruegel think tank has estimated that Europe needs an additional EUR 250 billion a year just “to deter Russian aggression.”[3]
“As the leading European asset manager, Amundi has a responsibility to develop strategies that allow investors to finance European strategic initiatives,” said Fannie Wurtz, Head of Distribution & Wealth Division, ETF & Passive Business Line at Amundi. “Clients are currently showing a significant interest in participating in efforts to enhance Europe’s defense capabilities and our upcoming Europe Defense UCITS ETF will give them a timely opportunity to invest in this essential project.”
Index performance
In backtested data, the STOXX Europe Total Market Defense Capped index has risen 214% in the last three years and 49% so far in 2025.[4] That compares with gains of 149% and 30%, respectively, for the STOXX® Europe Total Market Aerospace & Defense index, which also includes the segments of design, development, production and maintenance of commercial aircraft. The STOXX® Europe Total Market index, by comparison, has risen 16% and 3.9% over the respective periods.
Figure 1: Returns
Index selection process
Eligible companies that are part of ICB’s Defense Subsector are included in the index. Stocks in ICB’s Aerospace Subsector are also considered provided they raise revenue from core and extended defense and military business lines as detailed in Figure 2.
Figure 2: Business lines included in the index selection process
“Rising demand for defense-related investments or hedging opportunities makes our new futures on the STOXX Europe TM Defense Capped Index a natural next step,” said Matthias Graulich, Chief Commercial Officer at Eurex. “We’re pleased to expand our successful STOXX-based offering in European index derivatives, enhancing the financial ecosystem around the European defense industry. Contract specifications are aligned with existing STOXX products for seamless adoption.”
The index is currently made up of 21 securities from six different countries.
Figure 3: Top ten holdings
Innovative customization
The STOXX Europe Total Market Defense Capped index carves deeper than the six levels in FactSet’s RBICS taxonomy structure by analyzing the financial reports of companies that have revenue exposure to the extended sectors and selecting specific business lines that match the targeted theme. The index also applies a cap of 10% on single stocks’ exposure to avoid over-concentration in individual companies, and in alignment with UCITS regulation.
The offering showcases STOXX’s advanced customization capabilities with regard to index construction, where different thematic and sector selection approaches can be utilized to meet investor demand.
Visit this blog as we continue to cover the topic of defense stocks in the coming weeks.
[1] The starting universe is the STOXX® Europe Total Market index.
[2] EUR 34 billion were invested in EMEA-focused ETFs in the first three months of 2025, according to STOXX data, six times the entire net flows for all of 2024.
[3] Bruegel, ‘Defending Europe without the US: first estimates of what is needed,’ February 21, 2025.
[4] Price returns in euros through May 1, 2025.